Executive Summary in a Report

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<>. Homework Solutions for Engineering Economic Analysis, 11tb Edition Newnan, Eschenbach, Lavelle

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NRW l-$tQf

~-. Ke9 .....·' g.$to.; _c" ~$wr 4-StQry ~-~t!il.

0.000 $0 $330,000 $900,000 $1,080,000 $1,500,000 $1,575,000 $1,800,000 0.010 $0 $277,301 $776,443 $921,333 $1,282,517 $1,334,511 $1,525,156 0.020 $0 $231,287 $668,162 $782,520 $1,092,187 $1,124,311 $1,284,926 5'~}vrj0.030 $0 $191,007 $573,021 $660,765 $925,190 $940,112 $1,074,414 0.040 $0 $155,657 $489,209 $553,696 $778,287 $778,287 $889,471 0.050 $0 $124,556 $415,186 $459,300 $648,729 $635,754 $726,576 0.060 $0 $97,122 $349,641 $375,864 $534,174 $509,893 $582,735 0.070 $0 $72,863 $291,453 $301,927 $432,626 $398,471 $455396----- 0.080 $0 $51,357 $239,665 $236,242 $342,379" $299,582 ,79

S~)3.090 $0 $32,243 $193,457 $177,738 $261,972 $211,593 $241,82111100 $0 $15,212 $152,122 $125,500 $190,152 $133,106 $152,122 ~<...I 0.110 $0 $0 $115,054 $78,740 $125,840 $62,920 $71,909 1J.114 $0 -$5,628 $1013 2 $61,414 $102,005 $36,933 $42209 G.115 $0 -$6,997 $97,954 $57,198 $96,205 $30,611 $34,984 11.120 $0 -$13,622 $81,730 $36,779 $68,109 $0 $0 I<).k(~ l'.130 $0 -$25,850 $51,699 -$969 $16,156 -$56,546 -$64,624 ].140 $0 -$36,853 $24,569 -$35,010 -$30,711 -$J07,488 -$122,843 iJ.150 0 - 6,779 $0 - 65783 -$73,092 -$1'53,493 -$175421~~ -~ ':'.160 $0 -$55,755 -$22,302 -$93,668 -$111,509 -$195,141 -$223,018 -.170 $0 -$63,890 -$42,593 -$118,996 -$146,415 -$232,933 -$266,209 ~.180 $0 -$71,282 -$61,099 -$142,055 -$178,205 -$267,308 -$305,495 ,Vl\ L~90 $0 -$78,014 -$78,014 -$163,098 -$207,224 -$298,647 -$341,310 v.200 $0 -$84,159 -$93,509 -$182,343 -$233,774 -$327,283 -$374,038 -.210 $0 -$89,780 -$107,736 -$199,985 -$258,118 -$353,509 -$404,011 .220 $0 -$94,935 -$120,826 -$216,192 -$280,489 -$377,581 -$431,522

-:.230 $0 -$99,671 -$132,895 -$231,113 -$301,091 -$399,724 -$456,828 -240 $0 -$104,034 -$144,047 -$244,879 -$320,104 -$420,136 -$480,155 £.250 $0 -$108,059 -$154,371 -$257,606 -$337,685 -$438,991 -$501,704

a) Choice Table

Using the NPW values from the table above, we can identify the decision for each interest value. .

Value of MARR Decision If 0 < MARRS 7.7% 5-Story is preferred lf7.7 < MARR S 11.4% 3-Story is preferred If 11.4 < MARR S 15.0% t-storv is preferred If 15.0 < MARR S 100% Sell is preferred

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Homework Solutions for Engineering Economic Analysis, 11th Edition Newnan, Eschenbach, Lavelle

b) Incremental Analysis at MARR = 10%

This problem is one of neither fixed input nor fixed output. When the estimated resale value equals the present total investment, we have the special case whl A = Pi or i = AlP (comes from: EUAC = (P -:-S)(AlF, i, n) + Pi where P = S).

~pAlternative P A ~i Declsk Sell Parking Lot

0%o o

Keep Parkin Lot

$200

$4001-Story Suildin

$5552-Story Buildin

7.7% t-Stor

$7503-Story Buildin

11.4% 3-8tor .:"'-.....,~

$875 $105 $125 $5 "

4.0% _3-8tor4-Story Buildin

12.0%

$250 $20$1,009 $120 8.0% 3-8tOl5-Story Building

12.0%

4// Conclusion: Build 3-storv building.

All values in thousands.

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